Did a Neoliberal Energy Grab Backfire?

Crimea: an EU-US-Exxon Screwup

by PIERRE M. SPREY and FRANKLIN C. SPINNEY

Counterpunch, WEEKEND EDITION MAY 23-25, 2014

http://www.counterpunch.org/2014/05/23/crimea-an-eu-us-exxon-screwup/

On 17 May, William Broad’s piece, “In Taking Crimea, Putin Gains a Sea of Fuel Reserves”, appeared in the New York Times.  Broad explained  how the annexation of Crimea by Russia changed the legal claims for exclusive access to the maritime resources for the littoral nations of the Black Sea and the Sea of Azov.  At the core of the change is the 200 NM exclusion zone promulgated by the Law of the Sea, 1982.  Typically for the Grey Lady, Broad spun this fact into an anti-Putin tapestry using a charged mix of verbs, adjectives, and adverbs.  Nevertheless, Broad’s report contains tantalizing information that hints at a fascinating alternative explanation for the events leading up to the Crimean annexation.

The facts in Broad’s report appear to come almost entirely from an interview Broad had with Dr. William B. F. Ryan, a marine geologist at the Lamont-Doherty Earth Observatory of Columbia University, including the maps showing each littoral country’s Law of the Sea exclusion zones.  Ryan’s facts are not in dispute.

A point not mentioned by Broad is that no geographic location in either the Black Sea or the Sea of Azov is more than 200 NM from a coastline of the six littoral nations — Russia, Ukraine, Romania, Bulgaria, Turkey, or Georgia.  This can be seen by superimposing the 200 NM scale on the map below (Figure 1).   The overlap of all the “exclusion” zones covers 100% of both seas, with the six areas divvied up according to the separation rules codified by the Law the Sea.  The extensive overlap means that the change in the Ukraine-Russian border produces a profound shift in the exclusion zones belonging to Russia and Ukraine, as shown in  Dr. Ryan’s before and after maps (Figure 2 below).

Figure 1

The division of exclusion zones in the Black Sea is a big deal, because many geologists believe the floor of the Black Sea, like that of the North Sea, contains massive reserves of oil and gas, especially in deep water.   We have added the 600 foot depth contour in red on Figure 1.  This contour marks the beginning of the medium blue transition zone between the shallow coastal shelf waters and the deep sea waters outlined by the 6000 feet contour enclosing the deep blue area in Figure 1. (note: the contour lines in Figure 1 are in fathoms; 1 fathom = 6 feet.)  With the exception of the northwestern portion of the Black Sea, coastal waters with depths of less than 600 feet cover only small distances from the national coastlines.

Now let’s turn our attention to the exclusion zones. The Ryan maps in Figure 2 break up the Black Sea and Sea of Azov into the six exclusion zones introduced above.  They show how Russia’s annexation of Crimea did not change anything for Romania, Bulgaria, Turkey, or Georgia.

Figure 2.

According to Ryan’s maps, the annexation of Crimea added 36,000 square miles, more than doubling Russia’s legal claims from 26,000 square miles in the Black Sea and Sea of Azov to 62,000 square miles. Ukraine lost a corresponding amount.  More importantly, the overlay of the 600 foot contour shows that Ukraine no longer has access to any deep water.  This change is a verifiable consequence of annexation.

And it has profound implications.  Dr. Ryan also speculates the deep regions gained by Russia may be “the best” of the Black Sea’s deep oil reserves, although it must be remembered these reserves are not fully explored.  In fact, as of 2012, less than 100 exploratory wells have been drilled in the Black Sea’s deep water, and only one well has struck pay dirt.  That well, “Domino 1,” drilled in Romanian waters at a depth of 3200 feet, lies beyond the 600 foot contour line near the NE edge of the Romanian exclusion zone, close to what is now the Russian exclusion zone.

So, at first glance, it is easy to accept the picture slyly suggested by Broad’s charged verbs, adverbs, and adjectives: the annexation of Crimea by Russia was, at least in part, an aggressive energy grab by the Machiavellian Russian chess master, “Vlad the Bad” Putin.  Such a conclusion is certainly comforting to those in the US neoliberal establishment intent on starting a new cold war and grabbing control of even more state property of the former USSR via privatization, austerity economics, and good old fashioned bribery.

But putting aside the tendentious verbiage, there are facts in Broad’s reportage that suggest quite a different picture.  Note Broad’s several references to Exxon’s involvement and investment in Ukraine during 2012.  Does this not raise the possibility that the US and EU-inspired putsch in Ukraine may have been allied with the lust of western oil and gas multinationals for a stranglehold on European energy supplies?  If so, the figures compiled by Dr. Ryan may show how that coup blew up in our face.

To fully savor the possible dimensions of a US-EU-Exxon screw-up, let’s look at a chronology of the recent, none-too-subtle moves on the EU-Ukraine-Russian chessboard.

The EU started openly pushing Ukraine for a really raw, exploitative trade deal in March 2012. A month later, in April 2012, Putin signed up with ENI-Italy to explore Russian Black Sea oil/gas. In August 2012 Exxon put up big bucks to outbid Russia’s Lukoil for exploring Ukrainian Black Sea oil/gas (a deal crucial to Exxon’s breaking of Russia’s stranglehold on gas supplies for Europe). Over the next year, Yanukovych (no doubt convinced by massive contributions to his Bahamian bank accounts) pushed the Ukrainian parliament to pass all the laws required to meet the EU/IMF’s draconian austerity requirements. (see Michael Hudson’s “New Cold War Ukraine Gambit” for an explanation of neoliberal looting economics.) When it looked like he might succeed, Putin quickly imposed the gas/trade embargo on Ukraine in August 2013, starting a precipitous drop in the Ukrainian economy–and Yanukovych started backing away from the EU deal.

That’s when the EU-US-EXXON made their monumentally stupid move of unleashing the coup against Yanukovych, beginning with the November 2013 Maidan protests leading to the neo-fascist incited riots that ended in the coup of 27 February 2014.  The US-EU inspired coup, of course, gave Putin the perfect opening to welcome the grateful Crimeans back into the Russian fold–thereby swelling Putin’s domestic approval ratings enough to keep him in power for the next ten years. (For a good analysis of how Putin may view the world, see Mark Ames’  analysis of how he is exploiting the politics of resentment in Russia, Nixon-style.) And, perhaps not coincidentally, welcoming the grateful Crimeans also happened to more than double Putin’s Black Sea oil/gas holdings, while ruining Exxon’s chances for breaking his stranglehold on European gas supplies.

Putin certainly isn’t the greatest European strategist since Bismarck. But it doesn’t take much to win when opposed by dumb, ultra-greedy opponents guided by the arrogance of ignorance.  All Putin needed was seeing one tiny move further ahead.

The only thing dumber than the transparent US-EU-Exxon moves was the American and European media’s slavish coverage of the same.

Pierre M. Sprey, together with Air Force Cols John Boyd and Everest Riccioni, brought to fruition the F-16; he also led the design team for the A-10 and helped implement the program.  He is one of a very small number of Pentagon insiders who started the military reform movement in the late 1960s.

Franklin “Chuck” Spinney is a former military analyst for the Pentagon and a contributor to Hopeless: Barack Obama and the Politics of Illusion, published by AK Press. 

On the Road to a Hollow Military: Buck McKeon's A-10 Sell-Out of the Troops

Congressman Buck McKeon, Chairman of the House Armed Services Committee (HASC), is in charge of one of the most important committees in the Congress.  In theory, the HASC is supposed to oversee the Pentagon via its investigatory and budgetary responsibilities. In theory, the HASC's job should be to protect both the soldiers at the pointy end of the spear and the taxpayers who are sacrificing their hard earned treasure.  In practice the Chairman and most of the committee members are wholly-owned subsidiaries of the Pentagon and the defense industry — a self-interested faction in sense defined by James Madison in Federalist #10.  In practice, the HASC, and its sister committees, overlook and pump the flow of taxpayer dollars to their allies and patrons in the Pentagon and the defense industry. So, while congressmen and senators wave the flag, asserting ad nauseum that supporting the troops and their combat readiness are their top priorities, the flow real money indicates this is rarely the case.  

In Versailles on the Potomac, the iron law of any policy analysis aimed at uncovering real priorities is - Follow the Money.  And the best way to begin any analysis of real budget priorities is to trace the flow of funds, patronage, and power around the iron triangle of the military - industrial - congressional complex, aka the MICC.  

The revolving door  is a (the?) key lubricant to the money flowing around the triangle.  The flow sets the incentive structure for the different players: congressmen and senators (their staff members) retire to become lobbyists and industry consultants or move to high level Pentagon jobs; ditto for civilian and military employees of the Defense Department (and they also move to congressional staffs); and members of the defense industry (as well as the panoply of defense oriented think tanks) move back and forth between the Pentagon and industry.  The net result of this perpetual rotation is an upward spiral of personal enrichment, the enhancement of status and power, and most importantly, an industry-friendly defense budget. This “friendliness"  manifests itself in continual pressure to shovel money to the modernization accounts (R&D & Procurement) and those contractor-friendly parts of the increasingly privatized Operations and Maintenance (O&M) budgets.  

In a decision-making milieu dominated by the Iron Triangle, real combat capabilities: force structure and highly trained, professional soldiers, airmen, and seamen are necessarily a lessor priority.  The pressure to rob readiness to save modernization is present subtly during periods of increasing budget growth, but it becomes blatantly grotesque when the budget comes under pressure imposed by reduced rates of growth or cutbacks, as was the case in the early to mid 1970s, the early 1990s, and today.  The legendary “hollow military” of President Jimmy Carter the late 1970s, for example, was the delayed result of the explicit decisions made during the Nixon administration to rob the the readiness accounts to protect the modernization accounts in 1973. My first report, Defense Facts of Life, produced during the late 70s, documented this result in detail using official DoD data. 

Déjà Vu All Over Again

Today, the defense press is again dominated by reports describing the Pentagon’s need to cut force structure and the O&M personnel budgets.

Which brings us to the A-10.

The A-10, one of those rare low cost weapons whose effectiveness in real combat has far exceeded expectations, is rapidly becoming a poster child of the “rob readiness to protect modernization" mentality of the Iron Triangle. 

The DoD, the Air Force, and now HASC Chairman Buck Mckeon are determined to send the A-10 to the boneyard, in part because they want to save money by reducing a force structure.  In this case that force structure component conveniently has an O&M budget with a low amount of contract services support. This cutback would have a minimal impact on the money flowing to contractors.  The name of the game is to protect the money flowing to the contractors by sacrificing the A-10 as part of a larger strategy to save Procurement and R&D programs like the troubled F-35 or the more fanciful new long range bomber, which promises to make the F-35 look like an exercise in prudence.

Of course, as my friend Winslow Wheeler explains below, the pathologies implicit in the A-10 decision go well beyond sending very effective airplanes prematurely to the boneyard to cut personnel and O&M costs: the most serious loss will be a trained cadre of airmen who are dedicated to putting their lives at risk, if necessary, to supporting the soldiers doing the heavy lifting on the ground.  Retiring the A-10 is therefore a big step down a slippery slope, because this loss will only be replaced at great cost in treasure and blood in some future war or a future budget speedup (e.g., like that during the Reagan Administration)   

We saw how the slippery slope to a "hollow military” evolved insensibly out of seeming painless decisions in the early 1970s, and those, like Chairman Buck McKeon and Secretary Chuck Hagel, who ignore that history are condemned to repeat it.  But they won’t be asked to pay the bill.

Chuck Spinney

 

Buck McKeon's A-10 Sell-Out

by Winslow T. Wheeler

Supporters of the A-10 "Warthog" close air support aircraft in Washington and US combat Soldiers and Marines who have seen, and are seeing, combat in Afghanistan were stunned Monday to read about a decision of the Chairman of the House Armed Services Committee, Congressman Buck McKeon (R-CA).  He is joining with the Air Force and wants to retire all of these extraordinarily effective combat aircraft, sending them all to the boneyard at Davis-Monthan Air Force base, starting as soon as next year.

Ever since Chief of Staff of the Air Force (CSAF) Mark Welsh decided to get rid of all of 300-plus A-10s in the active and reserve Air Force and the Air National Guard, the media and congressional hearings have been stuffed with information from combat veterans, pilots and defense specialists about how spectacularly the A-10 has been performing inAfghanistan and all other recent US wars in Libya, Iraq and Kosovo--going as far back as Operation Desert Storm in 1991.

McKeon's A-10 sell-out comes in the form of a ruse.  His draft legislation, to be moved Wednesday (May 7) at the mark-up of the House Armed Services Committee of its FY 2015 National Defense Authorization Act (NDAA), creates a distinction without a difference with CSAF Welsh's retirement plan.  McKeon's own description of his handiwork says he "would limit funds . to retire A-10 aircraft unless each such retired aircraft is maintained in type-1000 storage [which]. means storage of a retired aircraft in a near-flyaway condition that allows for the aircraft to be recalled into use by the Regular or Reserve Components of the Department of the Air Force."  Falling for the ruse either foolishly or knowingly, some media describe the language as "something of a compromise" or emphasize the "near fly-away" condition of the A-10 fleet after it is sent to the boneyard at Davis-Monthan.  However, a simple check of what "type-1000 storage"means reveals that the aircraft will be made un-flyable and sealed in two layers of latex, which can be removed and the aircraft made operable only after considerable effort.

 

However, the storage condition of the aircraft is not the real reason they will be unavailable.  With the entire fleet to be sealed in latex, there will be no A-10s flying to maintain a cadre of qualified pilots and maintainers.  That cadre is to be disbursed throughout the Air Force or retired.  Without ongoing training and combat operations, their skills will erode to the point of evaporation.  It is not just the extraordinary characteristics of the A-10 itself that make it such a lethal system; it is the hard earned skill levels-very unique for the close air support mission-of the pilots, maintenance personnel and ground controllers.  The Aerospace Maintenance and Regeneration Group at Davis-Monthan may be able to prepare the A-10s for flight operations in a few weeks, but there will be no one to fly and maintain them, nor the cadre of ground combat operators who best know how to use the unique A-10.  Those skill levels will take months, rather years, to restore to the level that they are at today.

 

Some have immediately seen through McKeon's ruse; note the comments of Senators Ayotte, McCain, Graham and Chambliss in a press release of Tuesday May 6; note their acknowledgement that "Units will be stood-down, training will no longer occur, and crews will be re-assigned." 

McKeon's decision to entertain such a phony compromise comes as a surprise.  While McKeon has won himself a reputation with objective observers for primarily being a play-thing of the defense manufacturers due to his being so much on the take for their political contributions (as shown by his file at OpenSecrets.org), such politicians are usually also willing to show how stoutly they "support the troops" by funding weapons in use-and effective-in combat. McKeon would seem to have evolved to a different calling: he is retiring at the end of the current Congress; he continues to litter his nest with campaign contributions; he apparently is "over" supporting the troops with weapons that work.

 

There is no shortage of money for keeping the A-10.  That is clear in the draft NDAA that McKeon is recommending to the House Armed Services Committee.  McKeon compiled a list of 28 programs that he added money for in the bill.  It all costs an extra $5.8 billion, and the $400-$600 million needed to preserve the entire A-10 fleet in 2015 would only have ranked fifth or sixth in size of the programs he added-including $796 million for refueling a nuclear-powered aircraft carrier and $800 million for an amphibious warfare ship, both of which the Navy did not select to fund.

 

To pay for his $5.8 billion in add-ons, McKeon found a commensurate amount of offsets to keep the overall bill at the level required by the Budget Control Act of 2011 and subsequent congressional budget deals. McKeon did not even tap the huge amount requested to fund the F-35 Joint Strike Fighter ($8.3 billion), and he even set up another huge slush fund-not yet tapped-in the form of $6.2 billion for procurement and $64.7 billion for operation and maintenance in a $79.4 billion fund-as yet neither specified nor even formally requested by the Obama administration-for operationsostensibly for the war in Afghanistan.  Known as the Overseas Contingency Operations account, this $79.4 billion fund is just a placeholder amount based on the funding requested for 2014; it is still pending a decision in the Pentagon on what will actually be needed for the significantly reduced American presence in Afghanistan in 2015.  Nonetheless, McKeon wants to keep it at the inflated $79.4 billion level-with no telling what other programs he will shower with the excess funds.

 

In short, one thing Buck McKeon was not short of in his decision to sell out the A-10 was money

 

The final irony-to put it politely-comes with Buck McKeon's assertions about the war in Afghanistan, itself.  In his fact sheet on his version of the NDAA, he exhorts the Obama administration to keep a robust number of troops in the conflict there, saying the "mission cannot be carried out with fewer than 10,000 U.S. troops."  With his A-10 sell-out effected, those troops will not have the lethality against the enemy they can only have with the A-10. 

 

Buck McKeon is not just selling out the A-10; he is selling out those American forces in Afghanistan-and possibly elsewhere-in the future that will not have the A-10 to support them.